Pearson v. Commissioner
United States Tax Court
Petitioner inherited an interest in an income-producing building erected prior to the decedent's death by a lessee. The building was erected at the lessee's expense and was occupied under a lease which extended beyond the useful life of the building, and the lessee was obligated, upon expiration of the lease, to yield up the building, wear and tear excepted, in a good tenantable condition.
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Petitioner inherited an interest in an income-producing building erected prior to the decedent's death by a lessee. The building was erected at the lessee's expense and was occupied under a lease which extended beyond the useful life of the building, and the lessee was obligated, upon expiration of the lease, to yield up the building, wear and tear excepted, in a good tenantable condition. Held, the petitioner had a basis for depreciation based on the fair market value of the building at the time she acquired her interest in it by inheritance from her mother. See section 113 (a) (5), I. R.…
1Opinion of the Court
OPINION.
Black, Judge:
It is well settled that a prerequisite for a depreciation deduction from taxable net income under section 23 (1) of the Internal Revenue Code is an investment or depreciable interest in the property sought to be depreciated. Detroit Edison Co. v. Commissioner, 131 Fed. (2d) 619; affd., 319 U. S. 98. It is generally true that a lessor may not deduct depreciation if Jthe lessee has furnished improvements upon which depreciation is claimed. See Reisinger v. Commissioner, 144 Fed. (2d) 475. In those cases the lessor had no investment represented by the cost of such…
2Cases cited1 opinion
- Detroit Edison Co. v. CommissionerSupreme Court of the United States · 1943
3Cited by19 opinions
- Commissioner of Internal Revenue v. Moore. Moore v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1953
- Rowan v. CommissionerUnited States Tax Court · 1954
- Moore v. CommissionerUnited States Tax Court · 1950
- Schubert v. CommissionerUnited States Tax Court · 1960
- Rosalie M. Schubert v. Commissioner of Internal RevenueCourt of Appeals for the Fourth Circuit · 1961
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